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Once inside the skin, it hydrates, but not from the outside - putting pure water on the skin (hello long baths!) is drying. 

One more thing: the water used in cosmetics is purified and deionized (it means that almost all of the mineral ions inside it is removed). Like this, the products can stay more stable over time. 

Also, if your skin is sensitive, fragrance is again not your best friend. It’s the number one cause of contact allergy to cosmetics. It’s definitely a smart thing to avoid with sensitive skin (and fragrance of any type - natural is just as allergic as synthetic, if not worse!). 

If you are into chemistry (if not, we understand, just skip this paragraph), the reason is that electrolytes (you know, the Na+ and Cl- ions) screen the electrostatic repulsion between the head groups of ionic surfactants and thus support the formation of long shaped micelles (instead of spherical ones) that entangle like spaghetti, and viola, a gel is formed. However, too much of it causes the phenomenon called "salting out", and the surfactant solution goes runny again. 

Other than that, salt also works as an emulsion stabilizer in water-in-oil emulsions, that is when water droplets are dispersed in the outer oil (or silicone) phase. And last but not least, when salt is right at the first spot of the ingredient list (and is not dissolved), the product is usually a body scrub where salt is the physical exfoliating agent. 

Anyway, it doesn't matter if it reflects or absorbs, Titanium Dioxide is a pretty awesome sunscreen agent for two main reasons: it gives a nice broad spectrum coverage and it's highly stable. Its protection is very good between 290 - 350 nm (UVB and UVA II range), and less good at 350-400 nm (UVA I) range. Regular sized Titanium Dioxide also has a great safety profile, it's non-irritating and is pretty much free from any health concerns (like estrogenic effect worries with some chemical filters).

The disadvantage of Titanium Dioxide is that it's not cosmetically elegant, meaning it's a white, "unspreadable" mess. Sunscreens containing Titanium Dioxide are often hard to spread on the skin and they leave a disturbing whitish tint. The cosmetic industry is, of course, really trying to solve this problem and the best solution so far is using nanoparticles. The itsy-bitsy Nano-sized particles improve both spreadability and reduce the whitish tint a lot, but unfortunately, it also introduces new health concerns. 

The main concern with nanoparticles is that they are so tiny that they are absorbed into the skin more than we want them (ideally sunscreen should remain on the surface of the skin). Once absorbed they might form unwanted complexes with proteins and they might promote the formation of evil free radicals. But do not panic, these are concerns under investigation. A 2009 review article about the safety of nanoparticles summarizes this, "to date, in-vivo and in-vitro studies have not demonstrated percutaneous penetration of nanosized particles in titanium dioxide and zinc oxide sunscreens". The English translation is, so far it looks like sunscreens with nanoparticles do stay on the surface of the skin where they should be.  

All in all, Titanium Dioxide is a famous sunscreen agent and for good reason, it gives broad spectrum UV protection (best at UVB and UVA II), it's highly stable, and it has a good safety profile. It's definitely one of the best UV-filter agents we have today, especially in the US where new-generation Tinosorb filters are not (yet) approved.